Audio guide transcript

Welcome to your audio guide on goods and services tax and business activity statement basics – an overview from the Australian Taxation Office.

The recording lasts for approximately five minutes.

DavidDo you own a business? Or are you thinking of starting a business? Today, we will be talking about good and services tax and business activity statement basics.

JennySetting up a business can be an exciting time, but there are all sorts of things you must consider. One of them is taxation.

DavidAs a business owner, you are responsible for ensuring you meet all your business’s goods and services tax obligations, which is a tax of 10% on most goods and services purchased in Australia. Goods and services tax is usually shortened to GST.

JennyNot every business has GST obligations, which means only some business need to register for GST. Can you tell us who needs to register?

DavidSure, a business is required to be registered for GST if it has an annual GST turnover of $75,000 or more a year, or if they think they will reach this threshold.

JennyHow do business work out their turnover?

DavidTo work out a business’s GST turnover, you first need to calculate the business's total income. You then need to subtract any GST which was included in sales to customers. You also need to subtract any sales which did not receive payment, and the supplies which were not taxable.

Finally, you need to subtract any sales which were not connected to the business, any sales which were input taxed, and any sales not connected with Australia. The total which is left is your business GST turnover.

JennyIf you are unsure about GST registration or calculating your GST turnover, you can find out more at ato.gov.au, and search for ‘GST registration’ or call 13 28 66. Alternatively, you can contact a registered tax agent.

DavidNow, once your business is registered for GST you must include GST in the sale price of your goods. But there are some exceptions. Some goods are GST-free; these include most basic foods, some education courses, and some medical products and services.

JennyI think it’s important to make it clear that it is the end consumer who pays GST.

DavidThat right. Business themselves do not bear the cost of the GST. So if you have paid GST on any goods or services you have bought for your business, you can claim this money back through the ATO. This is called a GST credit and you claim these on your business activity statement.

JennyNow would probably be a good time to explain what a business activity statement is.

DavidI agree. BAS stands for business activity statement. As a business owner, you use this statement to report to the ATO how much your business has earned, the amount of GST collected, and the GST credits you are claiming for goods and services purchased. Just remember, you need to keep a tax invoice for any purchases you want to claim GST credits for that cost more than $82.50.

JennyBAS are issued by the ATO two weeks before the end of a business’s reporting period. Once you receive your BAS, fill it out, lodge it with the ATO and pay any money you owe by the due date. For due dates, please visit ato.gov.au/BASduedates

DavidYou can submit your BAS a number of ways.

JennyIf you are registered online via the Business Portal, you can access and submit your BAS online. If you are not registered online, your BAS will be sent to you in the mail and you lodge it that way. You can also submit your BAS through a registered tax agent or BAS agent. And if you have zero amounts to report, you can lodge by phone.

DavidIf you need any help or have any questions, visit ato.gov.au/GST. You can also call the ATO on 13 28 66 during business hours.

Jenny

Great – and remember the ATO is here to help. If you think you may have trouble paying your BAS on time, call them as early as possible so they can help you find a solution. And don’t forget, if you think you won’t be able to pay on time it’s still important you lodge on time.

DavidThanks for listening.

JennyBye.

DavidThis information was provided to you by the Australian Taxation Office. We are committed to providing you with advice and information you can rely on.

The information in this recording was current at June 2014. Your narrators were David Tradinic and Jenny Seedsman. This concludes the recording.

Basic information about goods and services tax (GST) and business activity statements (BAS), including what a BAS is, and how and when you need to pay GST to the ATO.

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